Mumbai, March 13 – The Sensex and Nifty indices experienced significant selling pressure for the third consecutive day on Friday, as rising crude prices fueled concerns about inflation and global economic stability amidst the ongoing conflict in West Asia.
Intense selling in global markets, coupled with sustained foreign fund outflows and continued weakness in the rupee, also dampened investor sentiment.
The 30-share BSE Sensex plunged by 1,579.82 points, or 2%, to close at 74,454.60. The benchmark finally settled at 74,563.92, down 1,470.50 points, or 1.93%.
A total of 3,348 stocks declined, while 941 advanced and 132 remained unchanged on the BSE.
The 50-share NSE Nifty dropped by 488.05 points, or 2.06%, to end at 23,151.10.
According to Hariprasad K, Research Analyst and Founder, Livelong Wealth, the sharp correction was primarily driven by the surge in crude oil prices and rising macroeconomic concerns for energy-importing economies like India.
The market capitalization of BSE-listed firms fell by Rs 10,24,181.74 crore to Rs 4,29,82,252.27 crore (USD 4.65 trillion) on Friday.
On the weekly front, the BSE benchmark declined by 4,354.98 points or 5.51%, and the Nifty dropped by 1,299.35 points or 5.31%.
Since February 27, the 30-share BSE Sensex has fallen by 6,723.27 points, or 8.27%. During this period, the market valuation of BSE-listed companies eroded by Rs 33,68,419 crore to Rs 4,29,82,252.27 crore (USD 4.65 trillion).
"Sentiment remained fragile amid escalating geopolitical tensions in the Middle East, which have pushed crude oil prices close to USD 100 per barrel and raised concerns about inflationary pressures and global economic stability," said Ajit Mishra, SVP, Research, Religare Broking Ltd.
"The situation has also triggered persistent foreign institutional investor outflows and weakness in the rupee, which slipped to record lows during the session, further weighing on market sentiment," he added.
Larsen & Toubro (L&T) saw the largest decline, with a fall of 7.52%. Other major decliners included Tata Steel, State Bank of India (SBI), Bharat Electronics, Maruti, and UltraTech Cement.
Hindustan Unilever and Bharti Airtel were the top gainers.
The BSE midcap select index declined by 2.87%, and the smallcap select index dropped by 2.48%.
According to Vinod Nair, Head of Research, Geojit Investments Limited, "Metals and auto stocks were among the worst hit, as supply constraints and higher input costs are expected to impact business and profitability."
Among the sectoral indices, Metal witnessed the largest decline of 4.83%, followed by Industrials (4.15%), Commodities (4.01%), PSU Bank (3.73%), Auto (3.27%), MidSmall Private Banks Quality (3.13%), Capital Goods (2.99%), and Consumer Discretionary (2.69%).
Brent crude, the global oil benchmark, rose by 0.25% to USD 100.7 per barrel.
"Elevated oil prices have also raised concerns about inflationary pressures, a widening current account deficit, and potential pressure on corporate margins, prompting investors to reduce exposure to equities and shift toward safer assets," said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.
"Against this backdrop, rate-sensitive and cyclical sectors such as banking, financial services, and automobiles witnessed notable selling pressure," he added.
The rupee slumped by 20 paise to close at a fresh record low of 92.45 (provisional) against the US dollar on Friday.
In Asian markets, South Korea's benchmark Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index, and Hong Kong's Hang Seng index ended lower.
Markets in Europe were quoting in negative territory.
The US market ended sharply lower on Thursday. The Nasdaq Composite fell by 1.78%, the Dow Jones Industrial Average tumbled by 1.56%, and the S&P 500 dived by 1.52%.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 7,049.87 crore on Thursday, according to exchange data. Domestic Institutional Investors (DIIs) however bought stocks worth Rs 7,449.77 crore.
On Thursday, the Sensex plunged by 829.29 points, or 1.08%, to settle at 76,034.42. Similarly, the Nifty fell by 227.70 points, or 0.95%, to close at 23,639.15.